“This is a trading rally not a multi-year rally,” he says. Eventually something’s got to give: “We’ve never had six-month period before where we’ve lost two million jobs and the market’s gained 50%,” he says. “That’s simply unprecedented.”

I noted earlier that the oddity of imports versus exports calculation would produce a positive contribution to GDP. Let’s look at the details of this, and find a way to understand what this means. First, off conceptualize the difference between what imports and exports are. At the most basic level, Imports represent our consumption of…Read More

There will be some good news and some bad news this morning at 8:30. That’s when GDP will be released. The Good News will be that we are no longer contracting at the painful rate of 6% annually; Call it the end of the Freefall period we saw from September 2008 to March 2009. The…Read More

I have the lead quote in the this page one NYT Business section article on the Markets — which came out prior to this NFP: “Less-worse isn’t the same as better,” said Barry Ritholtz, chief executive of FusionIQ, a research firm. “We want to see ‘good.’ In order to grow profits, in order for earnings…Read More

Last week, we saw Continuing Claims decrease — proof, said the green shooters, of the imminent economic recovery. Only, not so much: Those of you (who can still afford the luxury of) a trusty Bloomberg will note the ‘exhaustion rate’ for jobless benefits – EXHTRATE – reveals that people are not leaving the pool of…Read More

My friend David Grais has started a blog devoted to structured finance and the law. David is a very skilled litigator who spent most of his career doing corporate defense work, but has defected from the Dark Side to become a plaintiff lawyer working on a number of very important ABS cases.

David just posted a comment on the his firm’s blog [http://www.absinvestoradvocate.com] that has some interesting insights about the Obama Administration’s plans for “reforming” the securitization markets. His comment follows below. — Chris

Proving yet again that it has become a puppet of its sell-side parent SIFMA, the American Securitization Forum has just released a 241-page study that it commissioned from National Economic Research Associates, Inc. (here) to prove that securitization increases the amount and lowers the cost of consumer credit. It is as though the White Star Line commissioned a book on the RMS Titanic in which the author was told to extol the power of Titanic’s engines, the elegance of the china in its dining rooms, and the verve of its dance bands, while strictly ignoring its shortage of lifeboats.

There is only one question worth asking about securitization: why did securitization become the seedbed of the broadest and costliest epidemic of fraud in history? Until we face that question squarely and answer it honestly, securitization will remain in its coma. Unfortunately, the Obama Administration missed a chance to address that question in its plan to regulate the securitization market. (See the post immediately below.) ASF’s sponsorship of the NERA report is more insidious. By a combination of forbidding mathematics and emollient prose (“Recent experience appears to demonstrate readily that securitization is not inherently ‘good’ or ‘bad.’”), ASF tries to whisk us past that looming question and past the one measure that will best restore confidence in securitization: effective redress for investors against those that turned securitization from a useful financial tool into an orgy of misconduct.Read More

In today’s WSJ, we learn of the proposed shift in standards for retail stock brokers — from “Suitability” to “Fiduciary:” “Buried in President Obama’s proposed regulatory overhaul is a change that could upend Wall Street: Brokers would be held to a higher “fiduciary” standard that would compel them to place their client’s interests ahead of…Read More

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About Barry Ritholtz

Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

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"Misers aren't fun to live with, but they make wonderful ancestors." -David Brenner

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